What is Blockchain and How Does it Impact Marketing?
Blockchain technology has made waves in the worlds of technology and finance for several years, but it’s only recently that it has begun to attract interest from other sectors as well. One of the areas in which blockchain holds great potential is in marketing but a good share of marketers are as yet unaware of this fact.
However, if blockchain impacts marketing with anywhere near the speed it has impacted finance and technology, it could change the entire industry overnight. Learn more about blockchain and its probable impact on marketing so you can stay ahead of the curve.
How Does Blockchain Work?
To understand the effects of blockchain technology on the marketing world, it is necessary to know a little about what blockchain is and how it functions. Blockchain acts as a digital ledger for recording transactions, which are usually made with tokens of a given cryptocurrency. However, blockchain is unlike other digital records in that it does not store all transaction information in a central location such as a server bank.
Instead, blockchain creates copies of the record whenever an update occurs and distributes these copies to numerous devices across an extensive network. As a result, blockchain transactions are practically impossible to falsify, since any fraudulent records can be disproven by multiple copies of the correct record.
Because blockchain is built around the idea of easy verification, there needs to be a way to protect the personal information of its users. For that reason, many cryptocurrencies offer partial to complete anonymity for their users. Take Bitcoin for example, where users must create a digital Bitcoin address but do not need to link it to their physical place of residence (or even their legal name).
The Link Between Blockchain and Marketing Practices
The anonymity that comes with most cryptocurrencies will have a significant impact on marketing, for one all-important reason: current digital marketing strategy revolves around the collection of personal information from consumers.
When consumers buy products or services online using conventional money, their shopping choices can be tracked through Google or various social media platforms giving marketers the information they need to create a profile for their ideal customers and improve future campaigns. However, when cryptocurrency usage becomes more widespread, these opportunities will disappear.
The solution may lie in opt-in programs. At this point, marketers generally pay social media companies for the personal information they collect from users. The middlemen make a profit, while the consumers themselves are not compensated for the information they share.
However, when blockchain makes these middlemen obsolete, a mutually beneficial opportunity for both consumers and marketers may emerge: individual consumers will offer their personal information directly to marketers in exchange for direct compensation. In exchange for a higher up-front cost, marketers will receive significantly more accurate data from customers who are already interested in their brands. Everyone wins.
Become an Early Adopter and Reap the Rewards
Blockchain technology is set to change the marketing world just as it has changed the finance and technology worlds before it. However, that change can yield surprising new opportunities to those who are aware of it beforehand and take preliminary steps to prepare. Learn more about blockchain and cryptocurrencies now, so that you can prepare yourself for the future.
Guest Post By Nick Rojas:
Nick Rojas combines 20 years of experience working with and consulting for small to medium businesses and a passion for journalism to help readers grow. He writes about technology, marketing, and social media for WriterZone. When Nick is not sharing his expertise, he can be found spending time at the beach with his dog Presto.